From Java to "dot coms," investors have a way of latching onto the latest tech trend and driving stocks to dizzying heights--and Linux companies are the newest darlings of Wall Street.

Companies focused on Linux, as well as those that merely mention the
open-source operating system, are posting chart-topping gains as
investors pile into the stocks.

VA Linux, for example, jumped nearly 700 percent on its first day of trading last week,
breaking the record for the largest first-day gain of any initial public stock offering. VA sells mainly servers that run the Linux operating system software.

Linux, a Unix-like operating system, was developed by Linus Torvalds and
countless other programmers. It has made its way into the product lines of
the world's biggest computing companies and some believe it represents a
direct threat to Microsoft's grip on the OS market.

Linux has been in the investing limelight since August, when Red Hat became
the first Linux company to go public, bursting out of the gate
with a threefold gain on its first trading day.

But it isn't just the pure Linux companies that are getting some Wall
Street action. Several other companies have also benefited from a loose
Linux affiliation.

V-One, for example, soared 279 percent to $13.5 earlier this month, after the network security product maker announced its SmartGate software
would be compatible with Red Hat's 6.0 version of its Linux operating
system. But the shares plummeted the next day, giving up most of the gains.

Meanwhile, Learn2.com, an educational software maker, climbed 64 percent
yesterday after it announced it would sell Linux tutorials.

Corel's chief executive also attributes some of his company's recent stock
surge to its increased emphasis on Linux products. The software company said it expects
to receive half its revenues from Linux in
the next five years.

"With the early 'dot com' companies, everyone knew the Internet was growing
rapidly and everyone was looking for ways to play it in the equity markets,"
said Mat Johnson, an analyst with Thomas Weisel Partners. "This pretty much
holds true for Linux related companies, but we only have a few pure plays
for the operating system. There is a scarcity issue, so those companies will
get bid up--and any with a tangible relation to Linux."

Four Linux companies have debuted this year: Red Hat, Cobalt Networks, VA
Linux and Andover.Net, which operates Web sites with programming and Linux
news. But investment bankers said there are at least six in the pipeline for
the first quarter.

Meanwhile, corporate investors and venture funds are also throwing money at
Linux-related companies before they hit the public markets.

Linuxcare, for example, received $32.5
million to spur its expansion. The company, which sells Linux technical
support and consulting services, received investment offers totaling $300 million.

Corporate investors such as Intel are also betting heavily on Linux
companies. Intel has
invested in such companies as SuSE, which makes a Linux operating system
that is used in Europe. Other Linux companies that received Intel's money include
Red Hat, VA Linux and TurboLinux.

Johnson noted that with any hot market, investors need to be careful about
which companies are true Linux plays and which are merely taking a me-too
approach.

"Investors will need to look at the companies and see how they are involved
with Linux," he said.

Dan Kusnetzky, an analyst with International Data Corp., said the performance
of the Linux IPOs has investors acting irrationally.

"Investors are buying into a dream...and like any dream, they can wake up
and find the dream wasn't real," Kusnetzky cautioned.

For example, Applix, an office suite software company, has seen its shares rise fivefold since the summer as it touts its Linux affiliation.

"The company was bid up because of its association with Linux," Johnson
said. "That association is somewhat hyped."

Applix makes software for Linux, as well as other major operating systems.